Question

A man purchased a cow for Rs. 3000 and sold it the same day for Rs. 3600, allowing the buyer a credit of 2 years. If the rate of interest be 10% per annum, then the man has a gain of:
A. 0%
B. 5%
C. 7.5%
D. 10%

Answer 1

Hint: The buyer buys the cow on credit basis; which means the man has to pay an interest of 10% on his purchase for 2 years. So find the final price of the cow after paying 10% interest for 2 years, this will be the cost price and the selling price is Rs. 3600. Find the gain or loss using cost price and selling price.
Formula used:
${\text{Profit % = }}\dfrac{{SP - CP}}{{CP}} \times 100$, where SP is the selling price and CP is the cost price.

Complete step by step solution:
We are given that man (the buyer) purchases a cow for Rs. 3000 on a credit basis at a rate of interest 10% per annum for 2 years.
10% of Rs. 3000 is $\dfrac{{10}}{{100}} \times 3000 = Rs.300$
For 2 years, the interest is $2 \times 300 = Rs.600$
Therefore the actual price (cost price) of the cow is $3000 + 600 = Rs.3600$
Selling price of the cow is Rs. 3600.
Therefore, the profit or gain by selling the cow is
$\Rightarrow {\text{Profit % = }}\dfrac{{3600 - 3600}}{{3600}} \times 100 = 0\% $
The man has a gain of 0% as the cost price and selling price are the same.
So, the correct answer is “Option A”.

Note: Do not confuse marked price with selling price. The actual selling price is marked price minus discount price, when there is any discount. If there is no discount then the marked price is the actual selling price. The price of an item will be reduced after bargaining, price before bargaining is marked price and price after bargaining is selling price (bargaining can also be considered as discount here). If there is no bargaining allowed and the object is at a fixed price, then the marked price is the same as selling price.